As pending home sales rise, so does fear

The activity soars in Southwest Florida and the nation, but analysts worry that a lack of inventory will hurt market

By JOHN HIELSCHER

One of the most closely watched barometers of the future health of the housing market increased in March in Southwest Florida, statewide and throughout the U.S.

The pending-sales data hint that spring could be another rousing season for residential sales.

But some experts warn that the pace of sales will almost certainly begin to slow later in 2013, not because buyers are losing interest but because there simply will be fewer homes available to sell.

For now, though, residential sales continue to soar. The number of Americans who signed contracts to buy homes rose in March to the highest level in three years, the National Association of Realtors said last week.

The group's seasonally adjusted index for pending home sales rose 1.5 percent to 105.7, the highest since a homebuyer's tax credit boosted sales in April 2010.

The region's pending sales, meanwhile, which are contracts that have been signed but are not yet closed, were up 20.3 percent in March over February and 10.4 percent over last year, according to a Trendgraphix market trend report.

Even in the luxury sector of homes priced $1 million and up, pending sales were up 2.7 percent from the prior month and 29 percent from last year.

In Sarasota County, residential properties placed under contract in March hit a new record at 1,438, some 24 percent ahead of February and 10 percent over the year-ago period, which had been the record for pendings in a single month, Trendgraphix said.

"We are in the middle of an historic sales period, and the pending sales total indicates we could continue to see closings at near record highs," said Roger Piro, president of the Sarasota Association of Realtors.

The SAR calculates that pending sales of existing homes stood at 1,221, the highest number since 2006.

"The SAR claims that pending sales last month were the highest in the past seven years and possibly the highest in the region's history," he said. "A stunning increase of 31 percent year-over-year for single-family properties under contract but not yet closed in March is a convincing statistic to confirm a healthy season."

In Manatee County, pending sales were up 12.5 percent in March over the previous month and by 14.6 percent over the year. In Charlotte County, pendings were up 25.2 percent for the month and 4.9 percent for the year.

But a lack of inventory remains a concern throughout Florida and the U.S.

Sarasota had a 3.9-month supply of properties for sale, the lowest level in a decade. That figure represents how long it would take to deplete the current stock of homes at the current sales rate.

Manatee's inventory was 3.4 months, while Charlotte was 6.1 months. A six-month supply is considered a balanced market, while anything lower trends toward a seller's market.

Single-family inventory throughout Florida stood at a 5.3 months supply, the Florida Realtors trade group reported.

"Inventory remains an issue, but this is fast becoming a sellers' market and as sellers realize this, we expect inventories to rise as we approach the last quarter of 2013," said John Tuccillo, chief economist at Florida Realtors.

"Over the long term, we need to correct the imbalance between investors and owner-occupier households that has developed because of financing issues if the market is to prosper for a long time," he added.

Analysts say job gains and near-record low mortgage rates have driven home sales over the past year. Signed contracts nationwide are up 7 percent versus the same month a year earlier.

But completed sales have slowed in recent months -- and they dipped in March -- because of the limited supply of available homes on the market.

The number of homes for sale has fallen nearly 17 percent in the past year, to 1.93 million, the NAR says. At the current sales pace, that supply would be exhausted in 4.7 months.